Towie and Johntie. "Market reaction" currently is impossible to assess, so,it is very dangerous to come up with any "estimates' as to what this announcement means to the SP. But, what those latest figures do is to give reinforcement to the potential and anticipated "value" of that vital 100,000 tonne first production. LNY will be working on a repeat of that test run in 2014 and would be working on that 10-11 grams per tonne figure and those new numbers would be a great result for them not just for this first deal but would now expect higher grades from later cuts too.
They would now be looking forward to at at least 1,000,000 grams of gold from that 100,000 tonnes.
Just doing the simple arithmetic, we would come out with something like this. Dugsab, please tell us if this is too simplistic.
At current gold price we would be talking about AUD$58 per gram.
So, that translates into AUD$58,000,000 if that grade holds.
The deal with Maroon has them getting the first 3.5grams = 100,000 x 3.5 = 350,000 x $58 = $20,300,000
That leaves around $38,000,000 of which LNY gets 60%= around $23,000,000 and Maroon gets 40% = around $15,000,000
So, out of the whole $58,000,000, LNY gets $23,000,000 and Maroon,get $35,000,000 a 60/40 split in favour of Maroon, who do all the work.
With the IC @ 3,800,000,000 that would translate to around .006 per share.
Then things like PEs and "market reaction", liquidity etc come into play.
But, we are talking about just 100,000 tonnes out of 8 million tonnes just in this first project, which, itself, is just 10% of the entire Agate Creek lease and you would think that the next deal would be far more in favour of LNY with a lot of the initial costs already covered from the first deal.
Bring on that ML so we can stop the guessing!!!
